The United States has unveiled plans to acquire 1.2 million barrels of oil, aiming to replenish its Strategic Petroleum Reserve (SPR). The announcement was made by the Department of Energy on Monday.
According to the department, the intended purchase involves sourcing oil at an average price of $77.57 per barrel from two companies, following the submission of 18 bids.
This move follows the previous year's historic sale of 180 million barrels from the SPR, which formed part of a strategy aimed at stabilizing volatile oil markets and addressing elevated fuel prices in the wake of Russia's invasion of Ukraine. If this purchase is finalized, it will bring the total barrels repurchased to approximately 6 million. The recent surge in oil prices, driven by production cuts by major oil-producing nations like Saudi Arabia and Russia, has presented challenges for the administration in its efforts to rebuild the reserve. Consequently, last month, the government adjusted its target purchase price to $79 or less per barrel, up from the earlier range of approximately $68 to $72.
The Energy Department has further outlined its plan to acquire 3 million barrels for December delivery and another 3 million for January, both at the revised higher price point. It anticipates issuing additional solicitations for oil purchases for the reserve on a monthly basis, continuing through at least May 2024.
A spokesperson for the department emphasized the commitment of President Joe Biden and the Energy Department to refilling the SPR at fair prices, underscoring the importance of preserving this critical energy security asset while ensuring favorable terms for American taxpayers.